In settling claims against the largest banks related to “robo-signed” foreclosure documents and other flawed paperwork, should officials seek to rectify all the wrongs of the mortgage crisis? How big a settlement is big enough? What approach will net the best deal for struggling homeowners?

Last fall, Iowa Attorney General Tom Miller and a handful of counterparts from other states began pursuing a settlement aimed specifically at overhauling the mortgage servicing industry, which has been plagued with problems.

That endeavor alone has proven complex and time-consuming. So many parties are involved that 50 people or more have regularly crowded into negotiating sessions held in hotel conference rooms in and around Washington. Some rounds have lasted more than eight hours. The state and federal officials, as well as the bank lawyers and executives who have crammed into the sessions, have a running joke that the negotiations resemble the Paris peace talks on Vietnam.

Despite the intricate issues and numerous parties, officials say they are on the brink of securing a settlement that would revamp the way banks service millions of mortgages, lead to more loan modifications for troubled homeowners and extract roughly $20 billion in penalties that quickly could go toward foreclosure prevention efforts.

But New York Attorney General Eric Schneiderman has been arguing in favor of investigating an even wider range of mortgage-related practices, leading to “comprehensive resolution” that places homeowners and large investors in mortgage securities at the same table.

He has suggested that officials involved in the 50-state talks have been too hasty in seeking a settlement and are at risk of releasing banks from future claims that go beyond the issues probed so far.

Miller, who has been leading the multi-state effort, last week removed Schneiderman from the coalition’s executive committee, saying he had “actively worked to undermine” the efforts to reach a settlement. Some lawmakers and activists have rallied behind Schneiderman, calling his opposition to the yet-unfinished deal heroic.

Those involved in the settlement talks are increasingly frustrated at how their efforts have been perceived.

“We’ve been accused of being in bed with the banks. To say that to a group of people who have spent the last seven to 10 years fighting mortgage abuses day in and day out is an insult of the highest order,” said Iowa Assistant Attorney General Patrick Madigan, a longtime Miller deputy, who has worked on major settlements with subprime lenders such as Countrywide and Ameriquest. “It’s just unreal.”

Another person close to the talks, who like several others spoke on the condition of anonymity to discuss the situation more freely, said many in the group are “just exasperated. . . . This smear campaign of lies and innuendo, it’s uncalled for, it’s unprecedented, and it threatens substantial consumer harm.”

The settlement being negotiated with the banks is among the most complicated multi-state cases ever pursued, according to people involved in the effort. “The complexity is off the charts. There are just so many layers to it,” Madigan said.

The months of negotiations, both in person and through countless e-mails and conference calls, have involved not only state officials but also federal authorities from the Justice as well as the Housing and Urban Development departments. Banks also have their own legal teams, which include Wall Street heavy hitters such as H. Rodgin Cohen of Sullivan & Cromwell.

If Schneiderman were to get his way, his critics warn, homeowners could end up at the same table as massive asset and investment management firms such as Pimco and BlackRock. The interests of ordinary homeowners could end up competing with those of financial heavyweights. Even more thorny legal issues, such as those related to the way pools of mortgages were bundled and sold to investors, would be injected into the discussions.

Critics say such an approach would delay a final settlement, with no guarantee of helping homeowners at the end of the day.

Schneiderman insists on a comprehensive settlement that would both help homeowners and put the ailing housing market back on a stronger footing, said his spokesman, Danny Kanner. In addition, he said, Schneiderman’s efforts to investigate securitization have “produced results, and we are moving forward in an expeditious fashion.”

Kanner warned that the proposals being discussed by the Iowa-led group “would unequivocally preclude Attorney General Schneiderman and other state prosecutors from following the facts where they lead.”

People involved in the settlement talks insist that they support Schneiderman’s separate investigations and have no intention of releasing banks from claims related to issues beyond servicing — such as how mortgages were originated and turned into securities. Still, there’s no final agreement on how to word the settlement so that it gives banks a release only on claims related to servicing.

“We don’t want to stop them from doing their investigation, and even if we wanted to, we couldn’t,” Madigan said. “All states are sovereign.”

Schneiderman’s opposition to the settlement talks has won him widespread support. The New York Times editorial board recently wrote that he “should stand his ground in not supporting the deal” under consideration. The St. Louis Post Dispatch said Schneiderman’s opposition made him “look like a leader.”

On Tuesday, 21 members of New York’s congressional delegation wrote to Miller, saying that they were “deeply troubled” by his decision to remove Schneiderman from the group overseeing negotiations and that the action “sets a dangerous precedent for other attorneys general who, out of fear of what might happen, may choose silence over voicing valid concerns.”

Schneiderman’s absence from a final deal threatens to change the terms to which banks are willing to agree and could undermine the settlement altogether. Behind the scenes, acknowledged one person, “there is some serious cat-herding going on.”

Still, those leading the effort say that, for now, they are pressing ahead with the current approach.